Morning Brew July 27 2021
Senior Relationship Manager
Summary: Hawkish FOMC gives Nasdaq the best day in 2 years
As expected the FOMC delivered a hike by 75 bps yesterday and – also as expected - the press conference turned out to be the interesting part. Powell did not give a clear guidance on the future rate path, and this was interpreted as dovish by the markets. The next decisions are not set is stone but will be data-dependent and Powell downplayed the significance of the GDP number as often imprecise in the first reading.
The USD gave up ground and Equities gained with the Nasdaq positing the strongest gain since 2020. With 4.1%. Microsoft gained 6.7% and Alphabet 7.7%. Nvidia added 7.7% Tesla 6.5% and Apple 3.4%. The S&P jumped 2.6% and the Dow 1.4%.
The USD Index rose as high as 107.40 yesterday but lost more than 1% to trade at 106.20. EURUSD rose to 1.0220 and GBPUSD to 1.2180. USDJPY is now trading at 135.35. Gold can break above 1735 and Silver breached the 19 again. Bitcoin rose 12% off yesterdays low.
Further good news is an agreement between Biden and Senator Manchin on a number of key projects.
Meta disappointed with the first revenue decline since it`s IPO and shares fell 8 USD after hours.
Researcher Gartner gave a bleak outlook for the global Chip industry where demand is slowing due to inflation and less disposable income, on the other hand supply is increasing due to huge investments It cut the revenue growth forecast for 2022 from 13.6% to 7.4%. Samsung also reported it is seeing lower demand for phones and PC`s
This morning Shell reports record profits, Nestle raises the growth forecast, VW kept the guidance in place but stresses risks, Barclays disappoints.
Todays Key data points are the EU Consumer Confidence at 11:00, German CPI at 14:00 abd US GDP at 14:30 expected at 0.5%.
As the Fed made it clear it has not decided the next rate moves, data points will be more significant the next weeks. AS of now, Interest Traders are trading a 65% chance of a 50 basis point hike in their next meeting on September 21.
- Today: : Apple, Amazon., Nestle, Pfizer, Merck, L’Oreal, Shell, Comcast, Intel, Linde, TotalEnergies, Sanofi, Honeywell, Anheuser-Busch InBev, Keyence, Volkswagen, Air Liquide, Schneider Electric, Banco Santander, Valero Energy, Stellantis, Neste, BAE Systems, Arcelor Mittal
- Friday 29 July: Exxon Mobil, P&G, Mastercard, Chevron, AbbVie, AstraZeneca, Sony, Caterpillar, Colgate-Palmolive, BNP Paribas, Twilio, Pinterest
Physically Settled Futures:
STFQ2 will expire on 28th July at 02:00 GMT.
EMAQ2 will expire on 28th July at 09:00 GMT.
GCQ2, MGCQ2, XKQ2, ZLQ2, ZMQ2, ZSQ2 will expire 28th July at 15:00 GMT.
HOQ2, RBQ2 will expire 29th July at 15:00 GMT.
OILUKSEP22 will expire 29th July at 15:00 GMT.